Vitamin D₃ and its hormonally active metabolite 1,25-dihydroxyvitamin D₃ [1,25-(OH)2D₃] can be metabolized to a number of daughter metabolites, including 1α,25-(OH)2D₃- 26,23-lactone; this latter compound has four diastereoisomers. The 23(S),25(R)-lactone (naturally occurring) and the 23(R),25(S)-1α,25-OH₂D₃-26,23-lactone are both known to be able to inhibit bone resorption induced by 1α,25-OH₂D₃ under in vivo or in vitro conditions. To understand the mechanism of the inhibitory action of these two isomers on bone resorption we investigated the effects of 1α,25-OH₂D₃-26,23-lactone on unfractionated mouse bone marrow cells in vitro. The addition of 1α,25-OH₂D₃ to these cultures dose-dependently stimulated the formation of multinucleated cells over a range of 10-9-10-7 M. The 23(S),25(S)- and 23(R),25(R)-1α,25-OH₂D₃-26,23-lactones also increased the number of multinucleated cells, whereas the 23(S),25(R)- and 23(R),25(S)-1α,25-OH₂D₃-26,23-lactones failed to do so. In addition, these latter two diastereomers inhibited the 1α,25-OH₂D₃ stimulation of multinucleated cell formation, although the 23(S),25(S)- and 23(R),25(R)-1α,25- OH₂D₃-26,23-lactones and 24R,25-OH₂D₃ did not. These multinucleated cells responded to calcitonin and contained tartrate- resistant acid phosphatase, both of which are characteristic of osteoclasts. The present data suggest that inhibition of multinucleated cell formation is the mechanism by which the 23(S),25(R)- or 23(R),25(S)-1α,25-OH₂D₃-26,23-lactone inhibits bone resorption induced by 1α,25-OH₂D₃. (Endocrinology123: 781–786, 1988)